Ross Stores beats plans, hits 3Q record, ups outlook

Pleasanton, Calif. – Ross Stores Inc.’s net earnings grew in the third quarter by 83% to a record $105.1 million, up from $57.3 million last year. Year-to-date profit was similarly record breaking: up 44% to $299.9 million.

"We are very pleased with our robust sales and earnings growth in the third quarter and first nine months, both of which were well ahead of plan,” said Michael Balmuth, vice-chairman, president and ceo. “Our ability to deliver compelling bargains, while operating our business on much lower inventories, remains the primary driver of these outstanding results.”

The company also improved on quarterly inventory shortages, he said. Shoes and dresses continued to be the top merchandise categories.

The off-price chain’s earnings per share for the quarter ended Oct. 31 ballooned 91% to 84 cents per share from 44 cents per share in the year-ago period. Sales climbed 12% to $1.744 billion, with comparable store sales up a strong 8% over the 2008 same period.

Year to date, earnings per share increased 52% to $2.39 from $1.57 last year. Sales jumped 10% to $5.2 billion, and comparable store sales were up 5% on top of a 3% gain in the prior year period.

For the holiday season, the company – which operates 955 Ross Dress for Less stores and 53 dd's Discounts locations – is sticking to its original outlook for the quarter but has increased aspects for the full year.

"With a still uncertain economic climate, we believe it is prudent to maintain our prior forecast for both sales and earnings," Balmuth said.

Ross Stores is now projecting fiscal year earnings per share to increase 40% to 43% to $3.27 to $3.33, up from $2.33 in fiscal 2008.

Real estate initiatives call for total store growth to remain in the 4% to 5% range for Ross and dd’s combined in 2010. Balmuth said the company believes that “ultimately,” Ross can be a chain of at least 1,500 locations and that dd’s Discounts has the potential to grow to about 500 stores.